Round The World

New Delhi, 25 October 2011

India-Nepal Ties

WEED OUT IRRITANT

By Monish Tourangbam

Research Scholar, School of International Studies (JNU)

The Nepalese Prime Minister Baburam Bhattarai (a Jawaharlal Nehru University PhD holder) was greeted with much warmth at his alma mater and the bilateral visit declared a success filled with optimism and goodwill. But at same time one cannot ignore the innumerable irritants which need to be weeded out by policy makers on both sides before the ties can be taken to the next level.

Although Bhattarai is largely seen as the right man for betterment of India- Nepal relations, there are domestic elements at play in the Nepalese polity which could seriously thwart the process of deeper engagement between the two. Whereby, many Nepalese power- sharers perceive India as unduly interfering in their internal affairs. Undeniably, this is a major hurdle in sustaining ties based on the principle of mutualism.

True, India and Nepal share many cultural and socio-economic linkages but lack of proper institutional mechanism has largely depleted the vast area of opportunities between both. The porous border while being a bridge between Indians and Nepalese is a matter of concern vis-à-vis cross-border anti-national and other criminal activities.

Accordingly, the two PMs committed to extend all necessary support to facilitate expeditious completion of construction of roads, rail links and the integrated Check Posts on the India-Nepal border areas. Despite consistent efforts at the higher levels to bridge the trust gap between the two, anti-India rhetoric in Nepal has refused to wane. Agreements signed with India have often been seen as being detrimental to Nepal’s national interest.

Clearly, a lot of spade work needs to be done to reassure Kathmandu and emphasize that New Delhi wants development and growth in a newly democratic Nepal. But presently, Nepali politics needs to gain an air of certainty and a consensus developed at least in the realm of foreign policy. Inter-party and intra-party rivalries regarding power-sharing issues have continuously hindered the peace process.

The nascent Himalayan Republic has struggled to draft a working Constitution despite repeated extensions of datelines. Moreover, the issue of integrating the Maoist Army into the national army has been a hard nut to crack and one of the major impediments to the process of peace and reconciliation. The Nepalese Prime Minister painted grim consequences in case democracy fails.  

Remember, expectations were sky high when the monarchy was ousted ending the civil war, but implementing the reconciliation process has not been easy, worse political differences have denied stability to the country. Speaking at a function hosted by JD-U President Sharad Yadav in his honour, Bhattarai said, “We are optimistic about the constitution but if we fail, there is going to be the big question that whether or not the democratic path is appropriate. “Democracy has to be made more participatory. If we fail to do it legally and constitutionally, people will be forced to take up arms again,” he added.

Significantly, of the three Memorandum of Understanding (MoU) signed on  India’s grant assistance for the Goitre Control Programme in Nepal,  US$ 250m credit line between Nepal Government and the Export-Import Bank of India the one on Bilateral Investment Promotion and Protection Agreement (BIPPA) has encountered domestic opposition in Nepal.

According to sources, CPN-UML senior leader and former Finance Minister Bharat Adhikari accused the Prime Minister of signing BIPPA unilaterally without taking support of other Parties. Asserted he, BIPPA has been signed only on the basis of political causes, not to develop the country economically. 

In fact, Bhattarai on his return was greeted with black flags by hard-liners within his own Party, UCPN (Maoist). Cadres loyal to Mohan Baidya chanted slogans against the Prime Minister and accused him of going against national interests without proper consultations. Even some Maoist lawmakers are against the agreement.

A BIPPA provision has raised extra concern. Besides other things, the pact provides for a compensation grant to investors whose investments suffer loses due to war, armed conflict, a state of national emergency, etc. Two, such investors shall be accorded treatment by the host country, no less than the treatment accorded to its own investors or investors of any third state. In an effort to quash his critics, Bhattarai said that Nepal had already signed the BIPPA with five different countries; and that the agreement was signed with India following the same norms.

Speaking to journalists in New Delhi, he had commented, “I have taken a risk, but if you don't take risks, the country cannot develop. We are at the stage of capitalist development. If we want double digit growth, wish to raise the per capita income of citizens to $3,000 in ten years, and develop, this is the only route. It will create conducive environment for investment.”

Notably, another important agenda, Double Taxation Avoidance Agreement (DTAA), despite intense negotiations could not be inked, with the Nepalese Prime Minister putting the blame on “mis-communication”. Pursuant to the joint press statement, an agreement has been reached on a text wherein both sides have committed to sign the DTAA at the earliest possible once the respective legal procedures are completion.

Continually, various sections of Nepalese polity have accused India of trying to influence its political process. They have consistently demanded abrogating all past unequal treaties with India, including the 1950 Peace and Friendship Treaty in order to reflect changed circumstances.

However, the Treaty detractors should specify grievances and come clear on the provisions which they term “unequal”. As in the context of current realities, both leaders agreed to review, adjust and update the 1950 Treaty and other agreements. A Foreign Secretaries level committee is reportedly to be set up for this purpose.  

But more important than the political uncertainty in Nepal and India-Nepal irritants, the increasing influence of a rising China in India’s backyard is a foremost concern. Against the backdrop of increasing Chinese investments in various sectors, including hydro-power development and transport linkages between China and Nepal.

Add to this China’s drive to increase its foothold in the South Asian neighborhood using its economic prowess. Notwithstanding, the exiled Tibetan population in Nepal and their anti-China activities have clearly annoyed Beijing. Clearly, closer tie between Beijing and Kathmandu would guarantee control of anti-China elements.

In the final analysis, New Delhi cannot afford a continuation of uncertainty in its relationship with Kathmandu. Vigorous diplomacy should be launched both at the micro and macro-levels to bridge the trust gap and sustain multi-level linkages to complement such a process. ---- INFA

(Copyright, India News and Feature Alliance)